U.S. Bank Natl. Assn.

v Mathon (2010 NY Slip Op 52082(U)) Page 1 of 7

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U.S. Bank Natl. Assn. v Mathon
2010 NY Slip Op 52082(U)

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Decided on December 1, 2010
Supreme Court, Suffolk County

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Spinner, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law §
431.

This opinion is uncorrected and will not be published in the printed Official

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Reports.

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Decided on December 1, 2010
Supreme Court, Suffolk County

U.S. Bank National Association, Plaintiff

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against

Sheila Mathon, Hank Mathon, Mortgage Electronic

Registration Systems Inc. as Nominee and Mortgagee of
Record, WMC Mortgage Corp., the Law Offices of Joseph
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D'Elia, Key Bank of Long Island n/k/a Washington Mutual

Bank, Commissioner of Taxation and Finance, United States of
America-Internal Revenue Service and Shore Park Estates
Homeowners Association Inc., Defendants
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2007-30481
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Adam M. Marshall Esq.

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Cullen & Dykman LLP

Attorneys for Plaintiff

100 Quentin Roosevelt Boulevard

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Garden City, New York 11530

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Rosicki, Rosicki & Associates P.C.

Former Attorneys for Plaintiff

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51 East Bethpage Road

Plainview, New York 11803

Sheila Mathon

Hank Mathon

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U.S. Bank Natl. Assn. v Mathon (2010 NY Slip Op 52082(U)) Page 2 of 7

Defendants Pro Se

815 Anthony Drive

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Lindenhurst, New York 11757

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Jeffrey Arlen Spinner, J.

ORDER ON MOTION

Mot. Seq. 004-MotD

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Original Return Date: September 15, 2010

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Final Submit Date: November 17, 2010

Premises ure
815 Anthony Drive

Lindenhurst, New York 11757

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District0103

Section025.00
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Block02.00

Lot049.008
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This is an action wherein the Plaintiff claims foreclosure of a mortgage dated September
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28, 2006 in the original principal amount of $486,400.00 recorded with the Clerk of Suffolk
County, New York on October 16, 2006 in Liber 21401 of Mortgages at Page 349. The
mortgage secures a note of the same amount and encumbers real property commonly known
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as 815 Anthony Drive, Lindenhurst, Town of Babylon, New York and described as District
0103 Section 025.00 Block 02.00 Lot 049.008 on the Tax Map of Suffolk County. Plaintiff
commenced this action by filing a Summons, Verified Complaint and Notice of Pendency on
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September 26, 2007. Following the interposition of an Answer by Defendants then-counsel,

summary judgment was granted by Order dated April 14, 2008 and a Referee was appointed
to compute in accordance with RPAPL § 1321. Thereafter, by Order dated January 30, 2009,
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a Substitute Referee was appointed. On July 12, 2010, Plaintiff moved for a Judgment of
Foreclosure & Sale and, following the interposition of opposition by Defendants together
with the present Order To Show Cause, the application was voluntarily withdrawn.

Defendants SHEILA MATHON and HANK MATHON ("The Mathons") have moved

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pro se, by Order To Show Cause dated August 12, 2010, for a stay of all proceedings
under this index number. Their application recites a number of grounds for the relief
demanded including the pendency of a lawsuit in the United States District Court for the

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Eastern District of New York brought by the Mathons as plaintiffs under docket no. 10-CV-
3664, the failure of Plaintiff's counsel to serve notice of proceedings upon Defendants'

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counsel and finally, that Plaintiff's offer of a loan modification should have operated as a stay
of this action.

As to the claim involving the federal action, this cannot constitute a legally cognizant

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ground for relief in the instant matter. In order for such injunctive relief to lie, the competing
actions must have full and complete identity of claims, parties and the relief demanded,
Green Tree Fin. Servicing Corp. v. Lewis 280 AD2d 642, 720 NYS2d 843 [2nd Dept. 2001].
In the federal action, there is a lack of identity of the parties in that the Mathons have

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impleaded sixteen individuals and entities who are not parties to the instant action. Moreover,
the federal action has been brought under the federal Racketeer Influenced and Corrupt
Organizations Act ("RICO"), 18 USC § 1961 et. seq. which is not a subject of the instant
action. Since there exists such a dissimilarity of both parties and claims between the state and
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federal actions, this Court cannot grant injunctive relief under this theory.

Turning next to the claim of a lack of notice to counsel, Plaintiff asserts that since the
Mathons [*2]sought this relief by Order To Show Cause, it has withdrawn its motion for
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judgment, thus rendering the application to be academic. Defendants claim that Plaintiff
failed to serve their counsel Adam Gomerman Esq. with notice of their intent to seek
judgment. They rely upon this Court's Order of April 14, 2008 which directs, in pertinent
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part, that "ORDERED that the answer interposed by defendants SHEILA MATHON and
HANK MATHON is hereby stricken and deemed converted to an appearance and demand in
foreclosure, requiring service of all future papers, including but not limited to Notice of Sale,
Notice of Proceedings for Surplus Monies and Notice of Discontinuance of Action upon said
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defendants..." It is clear from the language thereof that service is to be made upon Defendants
and not necessarily their attorney. Moreover, Defendants had discharged their counsel prior
to the date of the application, thus rendering this claim to be academic. It must be stated here,
however, that this Court takes a very dim view of the tactic of withdrawal of an application as
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a way in which to deprive an adverse litigant of his or her day in court. That being said, the
Court finds that this claim for relief is devoid of legal and factual efficacy and likewise must
be denied.
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The issue of the claim of the forbearance/modification agreement, however, is an

entirely different situation, one that is considerably troubling to this Court. Defendants assert
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(and Plaintiff does not in any way controvert) that on April 17, 2009, without the benefit of
counsel, they executed a three page document entitled "Home Affordable Modification Trial
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Period Plan" which was propounded to them by Plaintiff. Indeed, a copy of the same is
appended as Exhibit C to the Affidavit of Thomas E. Reardon. According to Defendants (and
again, not controverted by Plaintiff), they timely remitted to Plaintiff the three payments of $
1,736.00 required thereunder and in compliance therewith, followed with nine more monthly
payments in the same amount. According to Defendants (and once again, not controverted by

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Plaintiff), they continued to send monthly payments of $ 1,736.00, doing so in

compliance with a letter from Plaintiff's servicer Chase Home Finance LLC dated June 1,
2009 and appended to their Order To Show Cause. In relevant part, this letter states, in bold

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face type, as follows;

"If you make all [3] trial period payments on time and comply with all applicable

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program guidelines, you will have qualified for a final modification. However,
there may be a period of time between your last trial payment and your first
modification payment as we finalize the documents and get them back from you.
During that interval, you should make a continuation payment at the trial period
amount, and an extra coupon has been provided for that purpose.That payment

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will be applied as a principal reduction payment on your loan after your final
modification is effective."

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It is undisputed that Defendants sent thirteen payments to Chase Home Finance LLC totalling
$ 22,568.00 in reliance upon both the aforementioned April 17, 2009 Trial Modification and
the subsequent June 1, 2009 letter and further, that the same were accepted by Plaintiff,
presumably under the terms and conditions dictated by Plaintiff. According to Defendants,
they regularly inquired as to the status of the final modification and were variously informed
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that all documents had been received, the application was with underwriting and finally,
underwriter had approved the final modification. Notwithstanding the continuing stream of
payments from Defendants and the verbal representations made to them, Chase Home
Finance LLC, by letter dated April 15, 2010 (two days shy of one year following execution of
the Trial Modification) notified Defendants that a loan [*3]modification would not be offered
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to them due to their inability to meet the existing guidelines therefor. The reason stated for
the denial was the inability to meet HAMP guidelines by modifying the payments to equal
31% of Defendants' gross monthly income.

In opposition to the foregoing, the Affidavit of Thomas E. Reardon, Assistant Vice-

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President of Chase Home Finance LLC (Plaintiff's servicing agent), plainly acknowledges the
foregoing assertions by Defendants but states, in Paragraph 7, that "...Due to a combination
of factors, however, including missing documents, the submission of stale financial data and
a significant influx of Trial Plan applications, the Mathons' Trial Plan was not reviewed by
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the underwriting department until on or about April 2, 2010." The Affidavit does state that
on June 30, 2010 the Mathons applied for a new modification but that they failed to supply
all necessary documents for consideration. However, nowhere in Plaintiff's submissions to
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this Court is there any substantiation of this claim nor is the issue of Defendants' payments
addressed. Too, there is no proof of any computation or other calculation explaining the basis
for denial herein.
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In further opposition to Defendants' motion, Plaintiff has submitted the Affidavit of

Adam M. Marshall Esq., an associate in the firm of Cullen & Dykman LLP. Mr. Marshall
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states under oath, in Paragraph 9 thereof, that "Since the Mathons moved by Order to Show
Cause to stay the foreclosure on August 12, 2010, further efforts have been made to provide
the Mathons with a loan modification based on verifiable income. On October 12, 2010,
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Plaintiff withdrew its Motion for Judgment of Foreclosure and Sale. In addition, a new
application for a loan modification was forwarded to the Mathons. However, the Mathons
have abjectly refused to complete the application or supply the financial documents
requested therein." This Affidavit by counsel seems to be somewhat at odds with the
averments of Mr. Reardon and is amply rebutted by Defendants' motion papers. Defendants

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have appended a plethora of documents dating from April 30, 2010 through July 28,
2010 evidencing their application for a new modification (which appears to be a HAMP
modification identical to the one that Plaintiff had just rejected) as well as their cooperation

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with the demands of Plaintiff regarding the same. Even so, while Defendants were
assiduously attempting to re-negotiate a modification, Plaintiff was instructing its counsel to

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continue prosecution of the foreclosure action. It is painfully obvious to this Court that
Defendants relied upon representations made by Plaintiff and acted affirmatively based upon
those representations, all to their serious detriment.

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There has been no disclosure by Plaintiff to this Court as to whether or not this loan in
foreclosure is deemed to be "sub-prime" or "high cost" in nature. Moreover, no mandatory
settlement conference has been held in this matter though same is plainly required pursuant to
CPLR § 3408.

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Since an action claiming foreclosure of a mortgage is one sounding in equity, Jamaica
Savings Bank v. M.S. Investing Co. 274 NY 215 (1937), the act by Plaintiff of commencing of
this action inescapably invokes the Court's equity jurisdiction. While it is to be noted that the
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formal distinctions between an action at law and a suit in equity have been abolished in New
York (see CPLR 103, Field Code Of 1848 §§ 2, 3, 4, 69), the Supreme Court nevertheless is
fully vested with equity jurisdiction and the distinct rules governing equity are still extant,
Carroll v. Bullock 207 NY 567, 101 NE 438 (1913). Speaking generally and broadly, it is the
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settled law of this jurisdiction that [*4]"Stability of contract obligations must not be
undermined by judicial sympathy..." Graf v. Hope Building Corporation 254 NY 1 (1930).
However, it is true with equal force and effect that equity must not and cannot slavishly and
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blindly follow the law, Hedges v. Dixon County 150 US 182, 192 (1893). Finally, as decreed
by our Court of Appeals in the matter of Noyes v. Anderson 124 NY 175 (1890) "A party
having a legal right shall not be permitted to avail himself of it for the purposes of injustice
or oppression..." 124 NY at 179.
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In the matter of Eastman Kodak Co. v. Schwartz 133 NYS2d 908 (Sup. Ct., New York
County, 1954), Special Term stated that "The maxim of "clean hands" fundamentally was
conceived in equity jurisprudence to refuse to lend its aid in any manner to one seeking its
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active interposition who has been guilty of unlawful, unconscionable or inequitable conduct
in the matter with relation to which he seeks relief." 133 NYS2d at 925, citing First Trust &
Savings Bank v. Iowa-Wisconsin Bridge Co. 98 F 2d 416 (8th Cir. 1938), cert. denied 305 US
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650, 59 S. Ct. 243, 83 L. Ed. 240 (1938), reh. denied 305 US 676, 59 S Ct. 356 83 L. Ed. 437
(1939); General Excavator Co. v. Keystone Driller Co. 65 F 2d 39 (6th Cir. 1933), cert.
granted 289 US 721, 53 S. Ct. 791, 77 L. Ed. 1472 (1933), aff'd 290 US 240, 54 S. Ct. 146, 78
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L. Ed. 793 (1934).

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Here, the Court has serious and grave concerns regarding Plaintiff's conduct in this
matter, which appears to be rife with bad faith. This can be amply seen by the acceptance of
multiple payments following the three trial payments, the promise albeit unfulfilled of the
permanent modification and the verbal assurances that the modification had been approved
juxtaposed with the vague denial issued one year after the trial agreement, the spurious

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U.S. Bank Natl. Assn. v Mathon (2010 NY Slip Op 52082(U)) Page 6 of 7

claims of non-cooperation by Defendants, the seeming offer of a "new" modification

and the withdrawal of the motion for judgment in an apparent attempt to divest this Court of
jurisdiction to deal with this Order To Show Cause.

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It is the province and indeed the obligation of the trial court to assess and to determine
issues regarding credibility, Morgan v. McCaffrey 14 AD3d 670 (2nd Dept. 2005). In the

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matter before the Court, the pendulum of credibility seems to swing heavily in favor of
Defendants. When the conduct of Plaintiff in this proceeding is viewed in its entirety, it
compels the Court to invoke the ancient and venerable principle of "Falsus in uno, falsus in

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omni" (Latin; "false in one, false in all") upon Defendant which, after review, is wholly
appropriate in the context presented, Deering v. Metcalf 74 NY 501 (1878). Regrettably, the
Court has, thus far, been unable to find even a scintilla of good faith respecting Plaintiff's
conduct. Plaintiff comes before this Court with seemingly unclean hands demanding

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equitable relief against Defendants.

After careful consideration, it is the determination of this Court that this matter be set
down for a hearing to explore whether Plaintiff has acted in good faith, whether or not
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sanctions should be imposed upon Plaintiff or whether the Court should consider the
invocation of other remedial measures.

It is, therefore
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ORDERED that the application of Defendants SHEILA MATHON and HANK

MATHON be and the same is hereby granted to the extent set forth herein; and it is further
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ORDERED that a hearing shall be convened in this matter, to be held on January 12,
2011 at 2:30 p.m., Courtroom 229A, Supreme Court, 1 Court Street, Riverhead, New York
11901; and it is further
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ORDERED that said hearing shall not be adjourned except upon order of the Court; and
it is further
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ORDERED that any relief not expressly granted herein is hereby denied; and it is further

ORDERED that within ten (10) days of the date of entry hereof, Plaintiff's counsel shall
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serve a copy of this Order upon the Calendar Clerk of the Supreme Court, upon Defendants
and all parties entitled to notice.
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This shall constitute the Decision and Order of this Court.

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Dated: December 1, 2010

Riverhead, New York

E N T E R:

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U.S. Bank Natl. Assn. v Mathon (2010 NY Slip Op 52082(U)) Page 7 of 7

______________________________________

JEFFREY ARLEN SPINNER, J.S.C.

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Return to Decision List

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